Vitalstatistics

Property ownership
A study by City University Business School and Land Securities Trillion of corporate property among FTSE100 companies, shows a strong shift from freehold ownership across all sectors of UK industry. Companies are increasingly reporting leased property as operating and finance leases. The estimsted cost of property operating leases is about one-fifth of total reported value of property.
Jesdev Saggar 020 7796 5578

Building tender prices
Quarter three change
Building tender prices rose slightly in the third quarter of 2001, the latest Tender Price Forecast from Davis Langdon & Everest finds. However it notes that the events of 11 September have generated uncertain economic conditions which may bring a four-year rise in prices to a halt. The main findings include:

• building prices have risen 6.6 per cent over the past year but are not expected to continue to rise at such a rate
  
• even before 11 September, some large projects had already been cancelled or postponed due to collapse of technology markets or the US slowdown
  
• construction projects dependent on tourism, already hit by effects of UK's foot and mouth disease will see further cutbacks
  
• the UK construction industry is now even more dependent on the government's promised building spend in health, education and infrastructure
  
• Tender prices are expected to rise only minimally over the next twelve months, by between zero and three per cent
  
• A recovery in confidence and more progress in advancing PFI and public sector work may generate price rises of three to five per cent in the year to the third quarter 2003.

Tender Price Forecast is available from Peter Fordham, research associate, Davis Langdon & Everest,Tel: 0207 497 9000

Year on year tender price change
Tenders from building contractors rose significantly faster than general inflation over the last year, according to the BCIS Tender Price Index compiled by the Building Cost Information Service.

Tender prices rose by 7.6 per cent between the second quarter of 2000 and the second quarter of 2001 compared with general inflation which rose by 1.7 per cent. Materials costs rose 1.8 per cent in the past year and nationally agreed wage rates rose six per cent.

The BCIS expects tender prices to increase faster than inflation over the next two years. A rise in new work output between 2002 and 2003 and an input cost increase above general inflation will increase upward pressure.
The Tender Price Index, BCIS Indices and Forecasts, £84, 020 7695 1500.

Outsourcing
Price, competitiveness and efficiency are cited as the main reasons for outsourcing in a survey by law firm Taro Lyons.

Common problems with outsourcing included lack of communication and failure to keep up with the business, said respondents who included business and financial services firms, engineering and distribution companies.

Close to half of those surveyed outsourced aspects of their business to suppliers — typically to between one and three suppliers each, while one in four said they outsource work to between four and ten suppliers.

The sector most likely to outsource to multiple suppliers is the finance sector. Nearly one-fifth of finance firms outsource aspects of their business to more than 20 suppliers. Most respondents had changed a supplier at least once in the previous five years. The most common reasons for doing this were poor service and price.
The Outsourcing Survey, Taro Lyons, Tel: 020 7405 2000, www.tarolyons.com